Manufacturing

Export

Apprenticeships

Town Centre

Transport

Legal

Retail

Wednesday, February 25, 2015

Local authorities battling the government over the way it decided how millions of EU funding was allocated have had their appeal dismissed by the Supreme Court.

The Supreme Court is the final court of appeal in the UK for civil cases and hears cases of the greatest public or constitutional importance affecting the whole population.

The case focused on the scope of the margin of discretion to be accorded to the Secretary of State, Vince Cable, in allocating EU structural funding and whether his allocation decisions in this case breached the EU principles of proportionality and equal treatment.

Advertisement

In 2013, the government announced that the Sheffield City Region Local Enterprise Partnership (which includes South Yorkshire along with north Nottingham and north Derbyshire districts) can expect €203m for 2014 to 2020 as part of €6.2bn (£5.3bn) of EU Structural and Investment Funds to boost growth under a simplified "Growth Programme."

In the previous settlement, South Yorkshire received €410m. From 2014-2020 this will be cut to €180m.

The legal challenge focused on the appropriate treatment of the consequences of the former status of South Yorkshire as a "phasing in" region in the 2007-2013 funding period and that this allegedly gave rise to an unfair allocation for South Yorkshire, which is now classified as a "transition region" for 2014-2020.

By basing new allocations on just the final year, 2013, the government did not take into account extra sums of money that South Yorkshire and Merseyside had received earlier in the period. It appeared that the regions were getting an increase in EU funding when based on 2013's figures.

The High Court rejected these substantive grounds of challenge and said that the methodology adopted by the Secretary of State was lawful and rational. However, the Court quashed Ministers decisions after ruling they were unlawful as they had been taken in breach of the Public Sector Equality Duty under section 149 of the Equality Act 2010.

The Government only carried out an Equality Impact Assessment after the decision was taken to protect Scotland, Northern Ireland and Wales from a cut of more than a five per cent. The decision meant that the Government had to reconsider its decision, taking into account proper equalities information.

Led by Rotherham Council, the authorities in South Yorkshire and Merseyside appealed against the High Court rejection. That appeal was dismissed in June when the judge decided that, due to the complex nature of the funding, Vince Cable should be afforded a wide margin of discretion and that the courts should not interfere.

The Court also refused permission to appeal but representatives escalated the case to the Supreme Court which granted permission to appeal. The case was heard in October 2014.

Today, Lord Sumption handed down the judgement that the points of appeal had been rejected by four votes to three. He explained that the Secretary of State was entitled to distribute funding to the four regions and also said that the decision to use 2013 as the baseline position for future allocations was "defensible" as the extra EU funding received by South Yorkshire and Merseyside was temporary and only provided on a transitional basis.

Lord Sumption added that courts are reluctant to interfere in decisions such as this and that they should be left to those in government like the Secretary of State for Business, Innovation and Skills who are "politically responsible for their actions."

European programmes such as the European Regional Development Fund (ERDF) have supported projects in Rotherham such as The Advanced Manufacturing Research Centre (AMRC), the Nuclear AMRC, the redevelopment of Rotherham Railway Station, the Rotherham Renaissance Flood Alleviation Scheme, the award-winning enterprise education programme Rotherham Ready, and business support programmes for high growth companies and enterprising exporters.